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Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?
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Launched on 04/16/2013, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $6.78 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, VLUE seeks to match the performance of the MSCI USA Enhanced Value Index.
The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for VLUE are 0.15%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.98%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For VLUE, it has heaviest allocation in the Information Technology sector --about 28% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 5.50% of the fund's total assets, followed by Intel Corporation Corp (INTC - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 29.68% of total assets under management.
Performance and Risk
So far this year, VLUE has gained about 6.01%, and it's up approximately 1.53% in the last one year (as of 08/11/2023). During this past 52-week period, the fund has traded between $81.86 and $99.54.
The ETF has a beta of 1.05 and standard deviation of 18.74% for the trailing three-year period, making it a medium risk choice in the space. With about 155 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $51.16 billion in assets, Vanguard Value ETF has $102.26 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is iShares MSCI USA Value Factor ETF (VLUE) a Strong ETF Right Now?
Launched on 04/16/2013, the iShares MSCI USA Value Factor ETF (VLUE - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $6.78 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, VLUE seeks to match the performance of the MSCI USA Enhanced Value Index.
The MSCI USA Enhanced Value Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for VLUE are 0.15%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.98%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For VLUE, it has heaviest allocation in the Information Technology sector --about 28% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 5.50% of the fund's total assets, followed by Intel Corporation Corp (INTC - Free Report) and Cisco Systems Inc (CSCO - Free Report) .
The top 10 holdings account for about 29.68% of total assets under management.
Performance and Risk
So far this year, VLUE has gained about 6.01%, and it's up approximately 1.53% in the last one year (as of 08/11/2023). During this past 52-week period, the fund has traded between $81.86 and $99.54.
The ETF has a beta of 1.05 and standard deviation of 18.74% for the trailing three-year period, making it a medium risk choice in the space. With about 155 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $51.16 billion in assets, Vanguard Value ETF has $102.26 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.